Customers of failed crypto-exchange FTX file class action lawsuit laying claim to firm’s assets

Customers of the failed crypto-exchange FTX on Tuesday reportedly filed a class action lawsuit against the firm and its top executives, including founder and former CEO Sam Bankman-Fried. They are seeking a declaration that FTX's holdings of digital assets belong to customers. This as per Reuters is the latest legal attempt to stake a claim to the diminishing assets of FTX. The firm is reportedly already at odds with liquidators in the Bahamas and Antigua as well as the bankruptcy estate of Blockfi, another failed cryptocurrency startup.

According to the lawsuit submitted in US Bankruptcy Court in Delaware, FTX had promised to segregate customer accounts but instead allowed them to be misappropriated, so clients should be compensated first.

The complaint stated that "customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda."

It represents more than one million FTX customers in the US and abroad and is seeking a declaration that traceable customer assets do not belong to the company. They also want that property held and traceable to the customers isn't Alameda property.

However, in the scenario where the court finds that the above mentioned assets are actually FTX property, then the customers should have a priority right to repayment over other creditors.

The once promising FTX last month filed for bankruptcy halting withdrawals after customers rushed to pull holdings.

Its founder Bankman-Fried is facing charges of a "fraud of epic proportions" that allegedly included appropriating customer funds to support his Alameda Research crypto trading platform.

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